The Construction and Infrastructure Equipment scheme announced in the Union Budget 2026-27 will boost domestic manufacturing, strengthen the local supply chain, and reduce excessive dependence on imports, Union Heavy Industries Minister H.D. Kumaraswamy said at the annual conference of the Indian Construction Equipment Manufacturers’ Association here on Tuesday (September 1, 2026).
The modalities of the scheme are yet to be finalised. The need to encourage greater participation of micro, small and medium enterprises (MSMEs) in the construction equipment value chain was also underlined by the Minister. media reports suggest the government is considering a much broader programme, with an incentive outlay of ₹11,500 crore over seven years While Union Finance Minister Nirmala Sitharaman in her Budget speech on February 1 had announced a scheme at an estimated cost of ₹200 crore.
“A globally competitive OEM (original equipment manufacturer) ecosystem can only be built on the foundation of a strong and capable supplier base,” Mr. Kumaraswamy said.
“The government will continue to encourage technology adoption, innovation and capacity building across the capital goods ecosystem.
The next phase of growth in the construction equipment sector will be driven not only by scale, but by technology and innovation,” he said. India needs to accelerate the development and adoption of fuel-efficient, low-emission, electric, hybrid and digitally-enabled construction equipment, and Indian manufacturers make construction equipment not just for India but also for the world, the Minister said.
